Weekly Policy Report 13 – 17 March 2023
This week it’s been all about the money. Well, more so than most weeks. Banks have crashed, multiple industries have been on strike, the labour market isn’t shifting, we’ve had tax credits on our mind, and Chancellor Jeremy Hunt unveiled his Spring Budget announcing how he is going to run our economy…
In for a penny – The minute he walked in the joint we could tell he was a real big spender… And apparently he has reason to be, since OBR forecasts turned out to be better than economists expected. This will be reassuring for businesses who have been telling us they aren’t feeling confident in the UK economy. We are happy the Chancellor took action to boost UK investment by introducing 100% expensing against tax for capital spend, something we’ve been pushing the government to do for ages, although it’s a shame he could only commit to the policy for three years. We are also very happy with the measures to combat skills shortages such as childcare provisions, career change support and support for those with disabilities or long-term sickness. We just hope it all pays off. Our Chief Economist flitted from TV station to TV station on Wednesday sharing our two cents on the statement, which you can find here.
Taking the credit – We responded to a government consultation on simplifying the R&D tax reliefs scheme. There are currently two separate ways in which the tax system supports R&D expenditure, but the government is considering merging the two. We put out a survey to members asking for views on this topic, and we summarised responses in our consultation response here.
Bringing home the bacon – ONS data shows there has been no change in headline unemployment rates in the three months to January. Unemployment is currently running at the very low rate of 3.7% meaning the labour market is proving to be much more robust than economists all thought. Good news for households looking to keep the cash flowing; less good news for businesses still grappling with skills shortages. Here’s our analysis.
Policy Voice – Our latest policy survey is live, and should be waiting for you in your inboxes. We want to hear our members’ views on what they actually think of ESG, whether they offer apprenticeships, and how confident they are feeling in the UK economy. These results will be important contributions to our ongoing work with government: we will be producing a policy paper on the ESG debate next month, we are working closely with the Department for Education on combatting skills shortages, and we send our business confidence index to the government each month. Find out about Policy Voice here.
Next week watch out for…
Tuesday 21 March
Oral questions to the Chancellor of the Exchequer in the House of Commons
House of Commons Treasury Committee will take oral evidence on the Spring Budget
Wednesday 22 March
ONS will release statistics on inflation for February 2023
Thursday 23 March
ONS will release statistics on business insights and impact on the UK economy for March 2023